Vendors open data centers for hire

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Up and down the Dulles corridor in Northern Virginia, numerous unmarked,
warehouse-type buildings are nestled among hotels, office parks and fast-food
restaurants. In the past, such a sight in the Washington area would have
signaled a classified government office. But today, it's just as likely
to be one of the many commercially owned buildings where government networks
are maintained.

Known variously as cybercenters, data centers and even Internet service
centers, these facilities promise to help budget- and labor-strained agencies
save money by outsourcing expensive information technology operations to
third-party specialists.

Outsourcing some data processing work has been around for years, but
what's different now are the wide variety of IT companies getting into the
game and the range of work customers are willing to farm out.

In the last six months, PC manufacturer Micron Electronics Inc., chip-maker
Intel Corp. and networking provider Qwest Communications International Inc.  to name just a few  have built large data centers.

"With the shortage of IT workers, everyone is having a hard time finding
qualified people. [Data centers] allow [agencies] to concentrate on their
core values, not on trying to provide computer services," said Rob Karmele,
marketing director of Internet services for Intel, which is opening an Internet
service center in Chantilly, Va., this month.

With so-called first-generation hosting, also known as co-location hosting,
the agency buys and maintains its own server but houses it in space leased
at the data center. The data center operator provides what's needed to maintain
the physical environment around the server, including the primary power
supply, air conditioning, backup generators, communication lines and physical
security.

"It is more economical because [agencies] don't have to worry about
the facilities or the environmental services like purified water or air
conditioning," said Bill Johnson, director of USDA marketing at the National
Information Technology Center, a nonprofit data center run by the USDA that
offers its services to other agencies (see below).

With second-generation hosting, the data center operator owns and maintains
the server plus the infrastructure to connect it to the Internet or a private
network. Then it will load the customer's software on this platform and
maintain it. The customer pays a monthly fee for services provided, similar
to a telephone bill. "We can handle everything," said Michael Sandberg,
director of Qwest's Cybercenter in Sterling, Va. "We will design the architecture,
manage the backup systems and do all the systems monitoring."

Another variation on the second- generation model is when the hosting
company owns the software license and leases time on the application to
the customer. Analysts expect this so-called application service provider
model to skyrocket during the next few years.

Data centers are popping up all over the country. On March 20, Micron
opened a 5,000-square-foot facility in Boise, Idaho. Qwest opened its 120,000-square-foot
building in Sterling, Va., in December. And Intel's 73,000-square-foot center
in Chantilly, Va., joins the company's other facility already running in
Santa Clara, Calif. Intel plans to have at least 10 centers online by the
end of the year, at a cost of more than $1 billion.

"Everyone must have a significant presence on the Internet if they want
to succeed," said Intel's Karmele.

Qwest's Sandberg agreed. "It is the Web hosting that is attracting government
agencies," he said. "About 20 percent of our space is leased to the government."

***

USDA competes with private data centers

Chances are that if you contract with a third-party data center, it's
going to be one that is owned and operated by a private company. Not always
though.

For more than 30 years, the USDA has run a data center in Kansas City,
Mo., that offers its services to other agencies. The USDA's National Information
Technology Center (NITC) currently supports more than 30 agencies and 70,000
end users in nearly every county in the nation.

In 1997, the USDA was awarded a $150 million contract by the Federal
Aviation Administration for data services. The USDA provides operational
support around the clock.

NITC competes with commercial vendors for clients, so it has to stay
on top of the latest technology and services. "You can no longer say the
government can't do it as well as private industry," said Bill Johnson,
director of USDA marketing at NITC. "Commercial competition has been for
the best because we have had to focus our business on customer service and
meeting our customers' needs."

NITC supports more than 525 commercial off-the-shelf products and manages
more than 10.7 terabytes of disk storage. In addition to its three IBM Corp.
mainframes, NITC has a client/server environment that supports Unix systems
from Hewlett-Packard Co., IBM and Sun Micro-systems Inc.